Res 05-021
RESOLUTION NO. 05-021
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA
AUTHORIZING THE PREPARATION, SALE AND DELIVERY OF NOT TO EXCEED
$10,000,000 PRINCIPAL AMOUNT OF 2005 REFUNDING CERTIFICATES OF
PARTICIPATION AND APPROVING CERTAIN DOCUMENTS AND AUTHORIZING
CERTAIN ACTIONS IN CONNECTION THEREWITH
WHEREAS, the Poway Redevelopment Agency is a political subdivision of the
State organized and existing under the laws of the State of California (the "Agency")
with the authority to assist in the financing of capital facilities on behalf of the City of
Poway, a municipal corporation (the "City"); and
WHEREAS, the Agency has assisted the City in financing various capital facilities
through the execution and delivery of the $10,000,000 1986 Certificates of Participation
(Capital Improvement Projects), which Certificates were executed and delivered to
finance the acquisition and construction of certain public facilities, and which were
prepaid on July 12, 1995 by the execution and delivery of those certain $9,315,000
1995 Certificates of Participation (1986 Capital Improvement Projects) (the "1995
Certificates"); and
WHEREAS, the Agency has additionally assisted the City in financing a sheriff
substation project through the execution and delivery of the $4,375,000 1996
Certificates of Participation (the "1996 Certificates") and, together with the 1995
Certificates, (the "Prior Certificates"); and
WHEREAS, the City has determined that it is desirable at this time, in light of
current favorable interest rates, to prepay the Prior Certificates by executing and
delivering its 2005 Refunding Certificates of Participation the aggregate principal
amount not to exceed $10,000,000 and the entering into by the City of that certain
Escrow Agreement, to be dated as of the first day of the month in which the Purchase
Agreement (as defined herein) is executed, by and among the Agency, the City and
U.S. Bank National Association (the "Escrow Agent"), the form of which has been
presented to this City Council at the meeting at which this Resolution has been adopted
(the "Escrow Agreement"); and
WHEREAS, in connection with the issuance of the 1996 Certificates, the City
Council duly executed that certain Trust Agreement dated December 1, 1996 (the "1996
Trust Agreement") which provides in Section 901 thereof for the transfer of title to the
Project (as that term is defined in the 1996 Trust Agreement) from the Agency to the
City upon defeasance of the 1996 Certificates; and
WHEREAS, in connection with the issuance of the 1996 Certificates, the City
Council duly executed that certain Lease Agreement dated December 1, 1996 (the
"1996 Lease Agreement") which provides in Section 7 .2(b) thereof for the transfer of title
to the Project from the Agency to the City upon defeasance of the 1996 Certificates and
which also provides in Section 4.2 thereof for the termination of the 1996 Lease
Agreement upon defeasance of the 1996 Certificates; and
Resolution No. 05-021
Page 2
WHEREAS, the City Council is now desirous of amending the 1996 Trust
Agreement and the 1996 Lease Agreement in order to provide for the retention of title to
the Project by the Agency in order to facilitate the refunding of the 1996 Certificates;
and
WHEREAS, the Agency and the City have further determined that the proposed
amendment to the 1996 Trust Agreement to avoid the transfer of title to the Project from
the Agency to the City is desirable and, inasmuch as such amendment will occur
Simultaneously with the defeasance of the 1996 Certificates, not adverse to Certificate
Owners (as defined in the 1996 Trust Agreement); and
WHEREAS, in order to accomplish the refunding of the Prior Certificates, the City
and the Agency further desire to enter into that certain Site Lease, by and between the
City and the Agency (the "Site Lease"), and that certain Amended and Restated Lease
Agreement, by and between the City and the Agency, which restates and amends the
1996 Lease Agreement (the "Lease Agreement"), each to be dated as of the first day of
the month in which the Purchase Agreement is executed, the forms of which have been
presented to this City Council at the meeting at which this Resolution has been adopted,
pursuant to which Site Lease the Agency will agree to lease certain real property and
improvements from the City and pursuant to which Lease Agreement the City will agree
to lease back such real property and improvements from the Agency and to pay certain
lease payments in connection therewith which will be pledged by the Agency to the
owners of the 2005 Refunding Certificates of Participation (the "Certificates") to be
executed and delivered pursuant to a Trust Agreement, to be dated as of the first day of
the month in which the Purchase Agreement is executed, by and among U.S. Bank
National Association, as trustee (the "Trustee"), the City and the Agency (the "Trust
Agreement"), the form of which has been presented to this City Council at the meeting
at which this Resolution has been adopted; and
WHEREAS, the Agency and the City have determined that it would be in the best
interests of the Agency, the City and the residents of the City to authorize the
preparation, sale and delivery of the Certificates in an aggregate principal amount not to
exceed $10,000,000, which Certificates evidence proportionate interests in certain
rights under the Lease Agreement, including the right to receive certain lease payments
to be made by the City thereunder; and
WHEREAS, the City Council desires to consent to the assignment of certain of
the Agency's rights, title and interest in and to the Site Lease and the Lease Agreement,
including the right to receive such lease payments from the City, to the Trustee pursuant
to an Assignment Agreement, between the Agency and the Trustee, to be dated as of
the first day of the month in which the Purchase Agreement is executed (the
"Assignment Agreement"), the form of which has been presented to this City Council at
the meeting at which this Resolution has been adopted; and
WHEREAS, the City Council desires to approve the form of a Purchase
Agreement (the "Purchase Agreement"), by and between the City and Wedbush Morgan
Securities, Inc. (the "Purchaser"), pursuant to which the Purchaser will agree to buy the
Certificates on the terms and conditions set forth therein, the form of which has been
Resolution No. 05-021
Page 3
presented to this City Council at the meeting at which this Resolution has been adopted
and to approve the form of Special Counsel Agreement by and between the City and
Stradling Yocca Carlson & Rauth, a Professional Corporation presented to this City
Council at such meeting (the "Special Counsel Agreement"); and
WHEREAS, the City Council desires to approve the form of a Preliminary Official
Statement relating to the Certificates (the "Preliminary Official Statement") to be
distributed to potential investors, for the purposes of facilitating the sale of the
Certificates at the lowest feasible interest rate, the form of which has been presented to
this City Council at the meeting at which this Resolution has been adopted; and
WHEREAS, the City has determined that it is necessary and desirable to amend
the 1996 Trust Agreement pursuant to an Amendment to Trust Agreement which will
amend the 1996 Trust Agreement to provide that title to the Project (as defined
thereunder) shall not transfer to the City upon defeasance of the 1996 Certificates (the
"Amendment to 1996 Trust Agreement").
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
as follows:
Section 1. Each of the foregoing recitals is true and correct.
Section 2. This City Council hereby consents to the preparation, sale and
delivery of the Certificates in an aggregate amount of not to exceed $10,000,000 in
accordance with the terms and provisions of the Trust Agreement, with the exact
principal amount to be that determined necessary by the City Manager to advance
refund and defease the Prior Certificates. The purposes for which the proceeds of the
Certificates shall be expended are to advance refund and defease the Prior Certificates
and to provide for a reserve fund, if any, and the costs of the preparation, sale and
delivery of the Certificates.
Section 3. U.S. Bank National Association is hereby appointed as Trustee on
behalf of the owners of the Certificates, with the duties and powers of such Trustee as
set forth in the Trust Agreement, and as the Escrow Agent with the duties and powers of
the Escrow Agent as set forth in the Escrow Agreement.
Section 4. The forms of the Escrow Agreement, the Site Lease, the Lease
Agreement, the Trust Agreement and the Assignment Agreement presented at this
meeting are hereby approved. Each of the Mayor of the City of Poway, the City
Manager or his designee (the "City Manager") and the City Clerk is hereby authorized
for and in the name of the City to execute the Escrow Agreement, the Site Lease, the
Lease Agreement and the Trust Agreement in substantially the forms hereby approved,
with such additions thereto and changes therein as are recommended or approved by
Stradling Yocca Carlson & Rauth, as Special Counsel to the City ("Special Counsel"), or
City Manager and the officers executing the same, including all changes necessary to
reflect the purchase of bond insurance as described in Section 5 below. Approval of
such changes and the designation of the Site shall be conclusively evidenced by the
execution and delivery of the foregoing documents by such officers. The Mayor of the
City, the City Manager and the City Clerk are hereby authorized to execute,
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acknowledge and deliver any and all documents required to consummate the
transactions contemplated by the Site Lease, the Lease Agreement and the Trust
Agreement, including, but not limited to, any termination agreements with respect to the
financing documents heretofore entered into in connection with the Prior Certificates
which the City Manager determines are required to be executed in order to accomplish
the defeasance of the Prior Certificates. The City Manager is hereby authorized to
cause the preparation of, and to execute and deliver, the Amendment to 1996 Trust
Agreement amending the 1996 Trust Agreement to provide that title to the Project (as
defined thereunder) shall not transfer to the City upon defeasance of the 1996
Certificates.
Section 5. The form of the Purchase Agreement presented at this meeting and
the sale of the Certificates pursuant thereto are hereby approved, and each of the
Mayor of the City and the City Manager is hereby authorized to evidence the City's
acceptance of the terms and provisions of the Purchase Agreement by executing and
delivering the Purchase Agreement in the form presented to the City at this meeting,
with such additions thereto and changes therein as are recommended or approved by
Special Counsel and the officers executing the same. Approval of such additions and
changes shall be conclusively evidenced by the execution and delivery of the Purchase
Agreement; provided, however, that the Purchase Agreement shall be signed only if the
aggregate principal amount of the Certificates does not exceed $10,000,000, the
present value of the debt service payments due with respect to the Certificates is less
than the present value of the debt service due with respect to the Prior Certificates (as
set forth in writing by the City's Financial Advisor) and the Purchaser's discount
(exclusive of original issue discount and any bond insurance premium) with respect to
the Certificates does not exceed 0.60% of the aggregate principal amount of the
Certificates. The City Manager is authorized to determine the day on which the
Certificates are to be priced in order to produce the lowest financing cost for the
Certificates, which determination shall be conclusively evidenced by the execution and
delivery of the Purchase Agreement by one of the aforesaid officers, provided, however,
that the net interest cost thereof shall not exceed 5.00%. The City Manager, or his
designee, is authorized to reject any terms presented by the Purchaser if determined
not to be in the best interest of the City and is further authorized to evaluate whether the
purchase of municipal bond insurance for the Certificates will result in a net savings to
the City and if so to purchase such municipal bond insurance.
Section 6. The form of the Certificates as set forth in the Trust Agreement (as
the Trust Agreement may be modified pursuant to Section 4 hereof) is hereby approved.
Section 7. The form of the Preliminary Official Statement presented at this
meeting is hereby approved, and the Preliminary Official Statement may be distributed
to prospective purchasers in the form so approved, together with such additions thereto
and changes therein as are determined necessary by the City Manager, or his
designee, to make such Preliminary Official Statement final as of its date for purposes
of Rule 15c2-12 of the Securities and Exchange Commission. Each of the Mayor of the
City and the City Manager is hereby authorized to execute a final Official Statement in
the form of the Preliminary Official Statement, together with such changes as are
determined necessary by the City Manager, or his designee, to make such Official
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Statement complete and accurate as of its date. The Purchaser is further authorized to
distribute the final Official Statement for the Certificates to the purchasers thereof upon
its execution by an officer of the City as described above. The City Manager and his
written designees are hereby authorized and directed to take whatever steps are
necessary to comply with the requirements of Rule 15c(2)-12 applicable to the
Certificates following their execution and delivery.
Section 8. The form of Special Counsel Agreement presented at this meeting
is hereby approved and the City Manager is authorized to execute such Agreement and
deliver such to Special Counsel.
Section 9. The Mayor of the City, the City Manager, or his written designee,
and the City Clerk are hereby authorized, jointly and severally, to do any and all things
and to execute and deliver any and all documents which they may deem necessary and
advisable in order to consummate the sale and delivery of the Certificates and
otherwise effectuate the purposes of this Resolution, including the advance refunding
and defeasance of the Prior Certificates, and such actions previously taken by such
officers are hereby ratified and confirmed. In the event the Mayor of the City is
unavailable or unable to execute and deliver any of the above referenced documents,
any other member of the City Council may validly execute and deliver such document,
and, in the event the City Clerk is unavailable or unable to execute and deliver any of
the above-referenced documents, any deputy clerk may validly execute and deliver
such document in her place.
Section 10. This Resolution shall take effect from and after its date of adoption.
PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway
at a regular meeting this 12th day of April 2005.
ATTEST:
or
J{1~q, ~
. iane Shea, City Clerk
Resolution No. 05-021
Page 6
STATE OF CALIFORNIA )
)SS
COUNTY OF SAN DIEGO)
I, L. Diane Shea, City Clerk of the City of Poway, do hereby certify under penalty
of pe~ury that the foregoing Resolution No. 05-021 was duly adopted by the City
Council at a regular meeting of said City Council held on the 12th day of April 2005, and
that it was so adopted by the following vote:
AYES: BOYACK, HIGGINSON, REXFORD, CAFAGNA
NOES: NONE
ABSENT: EMERY
DISQUALIFIED: NONE
~~~<<Y~
City of Poway